Is Teaching "The Social Responsibility of Business" a Responsible Activity?

By Cavaliere, Frank J.; Spradley, Larry W. | Education, Fall 1995 | Go to article overview

Is Teaching "The Social Responsibility of Business" a Responsible Activity?


Cavaliere, Frank J., Spradley, Larry W., Education


Introduction

Many textbooks and articles in recent years have exhorted business to be socially responsible. The venerable American Assembly of Collegiate Schools of Business (the "AACSB") and numerous other educational, business, and public interest associations promote this concept. But is there possibly less there than meets the eye?

Our textbooks tell us that changing societal expectations demand an increased level of participation by business in the social arena. We read and teach about the good, "interactive," and "proactive," companies that influence their external environments in positive ways, and how these companies do better (in the long run) than the bad "inactive" or "passive" companies. This concept is similar to teaching "leadership" which is also currently in vogue on many campuses. We are told that there is a growing consensus that business schools must teach more of the traditionally "soft" skills, and less of the more concrete (often quantitative) courses associated with business education (AACSB, 1993). MBA programs are seeking the softer side also. The GMAT exam has added two essay questions in an effort to test communication skills; something often found lacking in "quant jocks" (O'Reilly, 1994). Unfortunately, as with "leadership," there is little consensus on how to teach "social responsibility of business"; nor is there universal agreement as to what it means.

This paper will look at the social responsibility concept and major corporate trends in an attempt to provide a framework for analyzing the effectiveness of the social responsibility concept to the business educator.

Defining the Concept

Even though there is no universal agreement as to the meaning and scope of "the social responsibility of business," it should be useful to survey some of the different interpretations found in the literature.

An early proponent for socially responsible business activity was Oliver Sheldon, who is his book, The Philosophy of Management, stated that the governing principles of management must be based on the concept of service to the community (Luthans, 1987). Sheldon was a British industrialist who foresaw after World War I the need to moderate the less humanistic elements of scientific management.

In their successful textbook, Business, O.C. Ferrell and Geoffrey Hirt define social responsibility as "the obligation a business assumes to maximize its positive impact and minimize its negative impact on society" (Ferrell, 1989). They go on to say that most companies today consider the implementation of socially responsible actions a cost of doing business. A similar definition is adopted in the popular business text, Business and Society, by Frederick, Post, and Davis, where the authors define corporate social responsibility as "a business obligation to seek socially beneficial results along with economically beneficial results in its actions" (Frederick, 1992).

In contrast, the leading social responsibility minimalist is the Nobel Prize winning economist Milton Friedman who has stated that since a corporate executive is merely an employee of the business, he or she has a responsibility to conduct the business in accordance with the wishes of the stockholders; which generally means to make as much money as possible while conforming to the basic rules of the society" (Friedman, 1970).

A similar view was advocated by Alfred Rappaport in a 1990 interview with the New York Times: "Corporate management ... has neither the political legitimacy nor the expertise to decide what is in the social interest" (Rappaport, 1990). His view was that these are political matters to be dealt with by the political and judicial systems.

Farmer and Hogue in their text, Corporate Social Responsibility, take a pragmatic view of the concept:

Anyone who thinks for a few minutes about what any private company is doing can easily come up with a few pet ideas about additional things it should do. …

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